334 F.

2d 303
142 U.S.P.Q. 54

CHAPPELL & CO., Inc., and Frank Music Corp., Appellees,

v.
MIDDLETOWN FARMERS MARKET & AUCTION CO.,
Appellant.
SHAPIRO, BERNSTEIN & CO., Inc. and Edwin H. Morris &
Company, Inc., Appellees,
v.
MIDDLETOWN FARMERS MARKET & AUCTION CO.,
Appellant.
Matt DUBEY and Harold Karr, Appellees,
v.
MIDDLETOWN FARMERS MARKET & AUCTION CO.,
Appellant.
Nos. 14676-14678.

United States Court of Appeals Third Circuit.

Argued March 6, 1964.
Decided June 26, 1964.

Ronald M. Katzman, Harrisburg, Pa. (Goldberg, Evans & Katzman,

Harrisburg, Pa., Harold Tull, Harrisburg, Pa., on the brief), for appellant.
Herman Finkelstein, New York City (Charles H. Welles, 3d, Welles,
Mackie & McGrath, Scranton, Pa., Bernard Korman, New York City, of
counsel, on the brief), for appellees.
Before McLAUGHLIN and FORMAN, Circuit Judges, and LEAHY,
District judge.
McLAUGHLIN, Circuit Judge.

This is a consolidated appeal from a judgment of copyright infringement under

Section 1(e) of the Copyright Act. 17 U.S.C. 1(e) (1958).

The defendant, Middletown Farmers Market and Auction Co. (Middletown) is

a Pennsylvania corporation, operating a Merchandise Mart in Middletown,
Pennsylvania. Mid-City Trading Company is the proprietor and lessee of the
music department at the Mart, under an arrangement whereby Middletown
advertises the merchandise sold by Mid-City, through newspaper
advertisements and sales promotion over Middletown's loud speaker system.

Broadcasts over this system originate in the central office of Middletown, and
are carried to some fifty-eight speakers located on the premises and in the
parking lot. On certain stipulated occasions, Middletown played, over this loud
speaker system, the phonograph records of musical compositions, the
copyrights to which were owned by the plaintiffs appellees.1 This was done
without license or permission of the copyright owners or ASCAP, American
Society of Composers, Authors and Publishers, to whom a nonexclusive
licensing right was granted.

The defendant contended that these renditions were permissible under the
Copyright Act because directed to the promotion of the records for the benefit
of the copyright owners; that they amounted to 'advertisement' not 'public
performance for profit'.

The plaintiffs argued that these records were played throughout the store under
circumstances which made their rendition a public performance for profit
within Section 1(e) of the Copyright Act. 17 U.S.C. 1(e) (1958).

These consolidated cases were tried before Judge Follmer without a jury and
judgment was rendered for the plaintiffs in each case, in the amount of $250 for
each infringement, and $200 in attorney's fees for each plaintiff plus costs.
Defendants were further enjoined from performing publicly the musical
compositions involved.

At the trial below, it was stipulated by the parties that the musical compositions
involved were played over the defendant's loud speaker system on the dates
alleged; it was further uncontradicted that the broadcast of these compositions
emanated from the central office of the defendant, not the music department.

As to whether announcements were made, promoting the sale of the records

played, there was conflicting testimony. The manager of the Mart said
announcements promoting the sale of the records were made from time to time.
An investigator for ASCAP and his wife testified they heard no such
announcements at the Mart. The trial judge, however, left this factual issue

unresolved, and found only that these compositions were 'publicly performed *
* * for the entertainment and amusement of patrons attending such place and to
make such place of business an attractive place for the patronage of the general
public.' Finding No. 4.
9

This finding has support in the evidence and cannot be said to have been clearly
erroneous. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68
S.Ct. 525, 92 L.Ed. 746 (1948); R. M. Palmer Company v. Luden's, Inc., 236
F.2d 496, 498 (3 Cir. 1956); and it is dispositive, if the rendition of these
musical compositions in the manner described is a 'public performance for
profit' within Section 1(e) of the Copyright Act.

10

Section 1(e) of the Copyright Act confers two monopolies on the copyright
owner, that of reproduction of the musical composition by mechanical means
and that of giving public performance for profit. Jewell-LaSalle Realty Co. v.
Buck, 283 U.S. 202, 51 S.Ct. 407, 75 L.Ed. 978 (1931). See S.Rep.No. 1108,
60 Cong. 2d Sess. P. 9 (1909); H.Rep.No. 2222, 60 Cong. 2d Sess. P. 9 (1909).
In enacting the Copyright Act, Congress sought to give the composer or
copyright owner control, in accordance with the provisions of the bill, over 'the
manufacture and use of such devices' (mechanical reproductions) S.Rep.No.
1108, supra; H.Rep.No. 2222, supra.

11

The authorization by the copyright owners to record the musical compositions

had been given in this case, and the copyright owners could not restrict the sale
of the mechanical reproduction, i.e., the phonograph records (17 U.S.C. 27
(1958)), though under Section 1(e) they were entitled to specified royalties for
their manufacture. But while the record itself is thus free from further
contributions to the copyright, the use of the recordings for a public
performance for profit is still reserved to the copyright owners. 17 U.S.C. 1(e)
(1958). The surrender of one monopoly (the right to make mechanical
reproductions) does not carry with it the right to publicly perform the
copyrighted musical composition through a phonograph recording thereof. Cf.
Berlin, Inc. v. Daigle, 31 F.2d 832, 834-835 (5 Cir. 1929); Interstate Hotel Co.
v. Remick Music Corp., 157 F.2d 744 (8 Cir. 1947).

12

It follows that while the statute provides that once possession of a copy of the
copyrighted musical composition is lawfully obtained, (whether in the form of
phonograph record or sheet music), there shall be no restriction on its transfer-this cannot be read to permit 'public performance for profit' to bring about its
transfer or sale.

13

There was testimony by the manager of the Mart that the playing of the records

13

There was testimony by the manager of the Mart that the playing of the records
induced sales; and that this was their purpose in playing them. There was,
however, no finding by the trial judge that these renditions were or were not
connected with the sales promotions of the defendant: so that the argument of
the plaintiffs that the defendants publicly performed the musical composition
for profit 'under the guise of sales promotions' is inappropriate. It may be true
that these renditions served a dual purpose, 'sales promotion' and 'entertainment
and amusement of the customers of the Mart'; but it would seem to us that
Sections 1(e) and 27 of the Copyright Act do not authorize the public
performance for profit of a copyrighted musical composition even in
connection with the sale of a mechanical reproduction of the work. Otherwise,
a surrender of one monopoly would severely compromise the monopoly
reserved, i.e., 'the right to publicly perform for profit.' So that whether the
playing of the records was or was not connected with their sales promotion (the
factual issue the trial judge did not decide), if they constituted public
performances for profit within Section 1(e), plaintiff's copyrights were
infringed. See M. Witmark & Sons v. L. Bamberger & Co., 291 F. 776
(D.N.J.1923).

14

The trial judge affirmatively found that the musical compositions involved
were 'publicly performed for profit * * * for the entertainment and amusement
of patrons attending' (The Mart) and 'to make such place of business an
attractive place for the patronage of the general public.' Finding No. 4. We
believe this factual finding was sufficient basis for his concluding that the
renditions in this case amounted to 'public performance for profit' within 1(e) of
the Copyright Act.

15

The atmosphere created by the playing of recordings made shopping at the

Mart more pleasurable and attractive to the patrons. Though this was not of
direct pecuniary benefit, it was 'for profit' to the degree that it was
commercially beneficial to the Mart to have an attractive shopping atmosphere.
It is against the 'commercial, as distinguished from a purely philanthropic
public use of another's composition' that the statute is directed. Remick & Co.
v. American Automobile Accessories Co., 5 F.2d 411 (6 Cir. 1925). See
Herbert v. Shanley, 242 U.S. 591, 594-595, 37 S.Ct. 232, 61 L.Ed. 511 (1917).
So long as there can be discerned a 'material, tangible, commercial profit' in the
rendition of musical compositions, it is for profit within Section 1(e). See
Conference Rep.No. 2470, 82 Cong.2d Sess. (1952); U.S.Code Cong. &
Adm.News, 1952, P. 2310. See M. Witmark & Sons v. L. Bamberger &
Co.,291 F. 776 (D.N.J.1923).

16

Inasmuch as the defendant, in playing the recordings, was addressing a

considerable audience, in a large public mart, it must be regarded as a public

rather than private performance. Remick & Co. v. American Automobile

Accessories Corp., 5 F.2d 411, 412 (6 Cir. 1925). See Harms, Inc. v. Sansom
House Enterprises, Inc., 162 F.Supp. 129 (E.D.Pa.1958) affirmed Leo Feist,
Inc. v. Lew Tendler Tavern, Inc., 267 F.2d 494 (3 Cir. 1959). Under the
accepted decisional law it is clear that the playing of the records in the
complained of manner was a public performance for profit within Section 1(e).
17

Finally, the defendant-appellant contests the propriety of allocating to each

party plaintiff a $200 attorney's fee. It does not dispute that under Section 116
of the Copyright Act, an award of attorney fees to the prevailing party is
authorized. Its protest goes to the amount awarded.

18

The allowance of attorney's fees in copyright infringement cases has

traditionally been a matter peculiarly within the discretion of the trial judge
since he is in a better position to know the extent and value of professional
services rendered. Harms, Inc. v. Sansom House Enterprises, 162 F.Supp. 129
(E.D.Pa.1958) affirmed Leo Feist, Inc. v. Lew Tendler Tavern, Inc., 267 F.2d
494 (3 Cir. 1959).

19

In this instance, there were five separate plaintiffs and five infringements
alleged and found, with a single law firm representing all the plaintiffs. The
records in these actions reveal three sets of pleadings, pre-trial discovery, and a
consolidated trial with several hotly contested factual issues. Our more remote
view of the professional services rendered to the plaintiffs as a whole, does not
convince us that the total award of $1,000 in attorney's fees was unreasonable
or an abuse of discretion by the trial judge.

20

The judgment of the district court will be affirmed.

Chappell and Co., Inc., is the copyright owner of the musical composition
'Where or When', and Frank Music Corp. is the copyright owner of 'Hernando's
Hideaway'. These two pieces were played over the loud speaker system of the
defendant on February 25, 1961
Shapiro, Bernstein & Co., Inc. is the copyright proprietor of 'Sweet Sue-- Just
You' and Edwin H. Morris & Company, Inc. is the copyright proprietor of
'Tenderly'. These musical compositions were played in the manner described at
defendant's Mart on April 2, 1960.
Matt Dubey and Harold Karr are the joint owners of the copyright of 'Mutual

Admiration Society'. This was played in the manner described at defendant's

Mart on February 26, 1961.